Economic Losses Due to Strikes, Sit-ins, and Road Blockades

Economic Losses Due to Strikes, Sit-ins, and Road Blockades
(Asghar Ali Mubarak)
Strikes, sit-ins, and road blockades could cost the national economy about PKR 120 billion per day.
According to a recent official statement by Federal Finance Minister Muhammad Aurangzeb, political protests and long marches not only disrupt economic activity but also directly burden the poor and the daily-wage workforce.
The significant economic losses resulting from protests, sit-ins, and road closures impact the following key sectors:
Disruption of Trade and Business Activities: The closure of roads and markets shuts down local commerce, bringing buying and selling processes to a halt.
The suspension of trade and business activities during strikes and road blockades inflicts the most immediate and severe damage on the economy. Within just a few hours, the adverse effects can paralyze the entire supply chain. Closure of Markets and Shopping Malls: Major business hubs and wholesale markets are shut down due to blocked routes or security concerns. This reduces traders’ daily sales to zero, while fixed expenses—such as rent and electricity bills—continue to accrue.
Disruption of the Supply Chain: Trucks and containers transporting goods across the country get stranded en route. Consequently, factories fail to receive raw materials, and finished goods do not reach retail outlets. Loss of Perishable Goods: Perishable items—such as fruits, vegetables, milk, and meat—spoil while in transit because they fail to reach markets on time. This causes direct financial losses amounting to millions of rupees for farmers and commission agents.
Suspension of digital and online business: Internet and mobile services are frequently shut down due to the law-and-order situation. This brings the operations of e-commerce businesses, online delivery personnel, and freelancers to a complete standstill. Disruption in banking and financial transactions: The closure of business hubs and internet outages affect bank branches and ATMs, making it impossible for traders to clear cheques or execute large financial transactions.
The economic devastation faced by daily-wage earners and the labor class during strikes and road closures is the most painful and alarming aspect of this situation.
This economically vulnerable segment of society relies on daily earnings for sustenance; even a single day of closure can push their households to the brink of starvation:
Immediate loss of daily wages: Construction workers, painters, plumbers, and day laborers who gather at public squares find no work at all. With shops and factories closed, helpers and temporary staff lose out on their wages for the day.
Suspension of transport and delivery sectors: Rickshaw drivers, taxi and motorcycle-taxi riders, and online food delivery personnel are unable to earn a single rupee due to road closures and internet suspensions. It becomes impossible for them to even cover daily vehicle rental costs or fuel expenses. Losses faced by pushcart vendors and small shopkeepers: Small-scale vendors—such as fruit and vegetable sellers and those with roadside stalls—often fail to sell their stock due to a lack of customers. Frequently, their perishable goods spoil, causing them to lose even their initial capital investment.
Mounting debt burden: With the cessation of daily income, this segment of society is forced to obtain rations and necessities on credit or through interest-bearing loans, trapping them in a perpetual cycle of poverty. Helplessness during medical and educational emergencies: On days without earnings, there are no funds available for medication if a family member falls ill. Similarly, these daily disruptions jeopardize their children’s school fees and prospects.
Strikes, sit-ins, and road blockades have severe negative impacts on the country’s exports. International trade relies on punctuality and reliability; when domestic transport routes are blocked, Pakistan’s commercial reputation suffers globally:
Cancellation of international orders: Foreign buyers operate under strict deadlines. When road blockades prevent goods from reaching the port on time and ships depart without the cargo, international buyers cancel their orders and turn to other countries—such as Bangladesh, India, or Vietnam—for future business.
Unavailability of raw materials: Manufacturing units producing export goods (such as textile mills) require raw materials for production. When supply chain disruptions prevent raw materials from reaching factories, the production process comes to a complete halt. Additional financial burden: Even if goods reach the port, failure to load them onto ships on time due to strikes forces exporters to pay heavy demurrage charges. This drives up production costs and makes Pakistani goods more expensive in the global market. Damage to national reputation and credibility: In international trade, once a supplier’s credibility is lost, it takes years to restore it. Repeated shutdowns cause Pakistan to be perceived as an “unreliable supplier,” leading to long-term economic damage.
Loss of valuable foreign exchange: When exports stall, the inflow of dollars into the country decreases. This exerts pressure on the value of the rupee and causes the State Bank’s foreign exchange reserves to deplete rapidly. Strikes, sit-ins, and road blockades result in an immediate and significant decline in tax revenue. Revenue collection by the Federal Board of Revenue (FBR) and provincial departments relies directly on the continuity of economic and commercial activities.
When these activities are suspended, the national exchequer suffers losses in the following ways:
A sharp drop in sales tax collection: During strikes, when markets, shopping malls, and wholesale centers are closed, the buying and selling of goods comes to a halt. Since sales tax is levied on every transaction, the suspension of business activities causes an immediate fall in the government’s sales tax revenue.
Loss of customs duty: Road blockades and transport strikes halt the clearance of import and export goods at ports and dry ports. This disruption stops the flow of billions of rupees in daily customs duties and taxes collected at the import stage. Long-term decline in income tax: A reduction in the profits of business enterprises, factories, and traders directly impacts their income tax liabilities. When corporate earnings are affected, companies make lower advance tax payments to the government, thereby undermining the government’s annual tax targets.
Road closures and “wheel-jam” strikes severely restrict the movement of vehicles and public transport across the country. Reduced sales of petrol and diesel result in the government losing tens of millions of rupees in petroleum levies and associated taxes. Impact on Services Tax: Sectors such as hotels, restaurants, and transport companies—as well as the telecom sector in the event of internet suspensions—either shut down completely or operate at a limited capacity. Consequently, the services sales tax revenue collected by provincial governments from these sectors suffers significantly. When tax revenue declines, the government is forced to incur additional domestic and foreign debt to cover daily operational costs and fund development projects, thereby pushing the country deeper into a debt trap.
Maintaining law and order during strikes, sit-ins, and political protests entails exorbitant and additional security costs for the government. These are public funds that ought to be spent on education, healthcare, and development projects but are instead consumed by the deployment of security forces and the use of shipping containers in the name of maintaining order. This includes the movement and allowances of law enforcement agencies: thousands of personnel from the police, Frontier Constabulary (FC), Rangers, and sometimes the army are deployed across various cities and sensitive locations. The logistics, daily subsistence allowances, and travel expenses for these personnel place an additional burden of tens of millions of rupees on the national exchequer. Furthermore, there are costs associated with the requisitioning and rental of shipping containers: hundreds of containers are either commandeered or rented to seal off city entry and exit points as well as “Red Zones.” The government must pay millions in rent and compensation to the owners of these containers, while the transport industry suffers its own separate financial losses. Fuel consumption—specifically petrol and diesel—for security force vehicles, Armored Personnel Carriers (APCs), water cannons, and patrol units increases manifold compared to normal days, with the government directly bearing the cost. Use of tear gas and security equipment: Large quantities of tear gas shells, rubber bullets, batons, and other protective gear are deployed to contain protesters; replenishing these supplies requires significant government expenditure. Damage to public property and security vehicles: If protests turn violent, government buildings, Metro Bus stations, roads, and security vehicles are torched or vandalized. The government subsequently incurs costs running into billions of rupees to repair and restore these public assets. All these additional expenses exacerbate the budget deficits of federal and provincial governments, a burden that is ultimately passed on to the general public through taxation.
The most significant long-term damage inflicted on the national economy by strikes, sit-ins, and road blockades is the hindrance to investment. Investors invariably seek environments characterized by political stability, policy continuity, and law and order. When a country experiences frequent protests and road closures, the investment climate is severely impacted in the following ways: Heightened perception of country risk: Repeated shutdowns and political turmoil project an image of Pakistan internationally as an “unstable nation.” Credit rating agencies downgrade the country’s ranking, causing foreign investors to shy away from investing here.
Foreign companies cancel or defer plans to establish new factories or expand existing business operations. They transfer their capital to other stable countries in the region rather than keeping it in Pakistan. Regarding the lack of confidence among local investors: it is not just foreign entities—the country’s own major business groups and local investors are also wary of introducing new ventures or capital into the market due to the prevailing uncertainty. Many local businesspeople begin moving their funds abroad—a phenomenon known as ‘capital flight’.Delays in projects drive up costs and reduce investor profits. Whenever an atmosphere of sit-ins or strikes emerges in the country, the Pakistan Stock Exchange experiences a severe downturn. Driven by fear, investors offload their shares at rock-bottom prices and exit the market, dealing a blow worth billions of rupees to market capitalization. This impediment to investment stifles the creation of new job opportunities, thereby exacerbating unemployment and poverty. The stock market serves as a barometer of a nation’s economic health, reacting most swiftly to political shifts or unrest; whenever the country faces major sit-ins, long marches, or political confrontation, panic spreads through the market. Within just a few days of strikes, the KSE-100 Index can plummet by thousands of points, causing daily losses of billions of rupees in market capitalization. Amidst such uncertainty, investors begin selling shares at distressed prices to avoid further losses. With sellers outnumbering buyers, share prices tumble rapidly. In such scenarios, major financial institutions and mutual funds reduce their market exposure and temporarily shift capital into safe-haven assets—such as gold or cash—thereby draining liquidity from the market. Before investing in any country, foreign investors assess its political stability and policy continuity; frequent road closures and strikes cause Pakistan to be perceived internationally as a “high-risk zone.” When global rating agencies (such as Moody’s and Fitch) downgrade the country’s credit rating, the costs of insurance and financing rise for foreign companies operating here. Trends from recent years indicate that political instability often leads multinational corporations to either suspend their projects in Pakistan or shift their focus to other countries in the region. When domestic conditions deteriorate, privatization plans and major trade and investment agreements with foreign nations stall for extended periods, preventing the national treasury from timely inflows of foreign currency. Political uncertainty and strikes not only inflict immediate losses worth billions of rupees on the stock market but also erect a formidable barrier against foreign investment—the very foundation of the economy’s future. To mitigate the massive economic losses caused by strikes, sit-ins, and road closures, and to safeguard the national economy, experts propose a key measure: all political parties should collectively commit to a long-term economic agenda that remains insulated from political upheavals. While protests and political differences have their place, economic policies, CPEC, and foreign investment projects must be kept entirely separate from political strife. Instead of blocking key trade routes, highways, and “Red Zones” in federal and provincial capitals, designated areas outside the city or specific grounds (such as the Parade Ground in Islamabad) should be allocated for protests. In light of Supreme Court directives, legislation should be enacted to classify the blocking of economic arteries—such as motorways and routes to ports—as a serious offense. There should be a complete ban on suspending mobile services and internet access in the name of maintaining law and order. Protecting the online economy: Keeping the IT sector, freelancers, e-commerce, and online banking operational can prevent daily losses amounting to billions of rupees. During sit-ins or strikes, secure routes or “green channels” should be provided under the supervision of security forces to facilitate the movement of freight vehicles, export goods, and perishable items (such as fruits, vegetables, and milk). The government, in collaboration with Chambers of Commerce, should establish a fund to provide daily wages or rations to registered daily-wage laborers in the event of strikes or forced business closures. A mechanism for immediate dialogue: High-level parliamentary or constitutional forums should be activated to address the demands of traders, transporters, and political parties before they resort to street protests, thereby enabling issues to be resolved through negotiation.